GE pulls plug on Electrolux's deal
Electrolux's deal to buy General Electric's appliance business has broke down after objections from the American Department of Justice sought to stop the acquisition.
GE said it ended the nearly SEK 24 billion agreement on Monday and added it was entitled to a break-up fee of USD 175 million from Electrolux. News of the termination made the Electrolux shares go down by roughly 13 percent before the market closed.
"The appliances business is performing well and GE will continue to run the business while it pursues a sale," the company said in a new release.
The deal ran into trouble over the summer when the US Department of Justice asked a court to stop it from going ahead. The department said the purchase would create an unfair market.
Electrolux said the company will continue it efforts to expand beyond its core European market.
"Although we are disappointed that the acquisition will not be completed, Electrolux is confident that the group has strong capabilities to continue to grow and develop its position as a global appliances manufacturer," company president and CEO Keith McLoughlin said in a news release.
Electrolux is one of the world's biggest manufacturer of fridges, stoves and washing machines and sells under brands such as Frigidaire, AEG and Zanussi as well as its own name.
Although the company is based in Sweden, only about 2,000 of its 60,000 employees work in Sweden.